Five Long Island lenders paid a "bogus" nonprofit to hide their borrowers' high default rates so they could keep licenses to make federally insured loans, the U.S. government charged in a civil suit.

Between 2008 and 2010, the height of the mortgage crisis, these lenders channeled funds through the Maryland-based Rainy Day Foundation and its successor to pay troubled borrowers' monthly payments -- more than $9,000 on some loans and often without the homeowners' knowledge, said a suit filed Monday in Central Islip by the U.S. attorney's office for the Eastern District, the U.S. Department of Housing and Urban Development and the Federal Deposit Insurance Corp.

Lenders are barred from making payments under Federal Housing Administration rules. At the time, FHA loans were practically the only action in home loans. To cut losses, the agency had begun suspending and pulling licenses of more lenders with high default rates.

The suit said the nonprofit and Default Mitigation Services, set up after federal officials began probing Rainy Day, orchestrated and marketed the scheme. They got 42 clients, charging $250 to $300 per loan at first, then later a fee per mortgage payment, the suit said, and a Nevada Indian tribe acted as the official agency granting funds to borrowers.

The scam forced the federal government to pay more than $5.6 million in claims to mortgage investors and deprived homeowners of legitimate counseling, sending many into foreclosure, the suit said.

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Authorities accused the nonprofit and four of the lenders of bank and wire fraud and making false claims. They want millions of dollars in restitution and penalties from the defendants, which include top executives at Melville-based Franklin First Financial; Garden City-based Mortgage Source; Westbury-based Continental Mortgage Bankers; and Melville-based Somerset Mortgage Bankers.

The fifth lender, Intercontinental Capital Group in Bohemia, was sued in a separate, limited complaint and agreed to pay $424,859 to settle false reporting allegations in 11 instances between October 2008 and April 2009. The settlement, which did not accuse the lender of underwriting bad loans, must be approved by the judge.

"Six years ago, Intercontinental Capital Group made a handful of small donations to a charitable foundation to help some of its borrowers make payments on their mortgages," the lender's attorney, Andrew W. Schilling of Manhattan, said in an email. "ICG is pleased to have fully resolved this matter and put it behind them."

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Defendant Todd Ludlow, the nonprofit's senior vice president and managing partner of Default Mitigation Services, said the program gave grants to borrowers for no more than three months and was not aimed at helping lenders: "There was never any intention of fraud or deceit."

Other defendants could not be reached or did not return calls.